Japan's Shinsei Bank poison pill defence backed by proxy advisory firm
Reuters
Published Nov 05, 2021 03:30AM ET
Updated Nov 05, 2021 08:36AM ET
By Makiko Yamazaki
TOKYO (Reuters) -U.S. proxy advisory firm Glass Lewis & Co on Friday recommended shareholders of Japan's Shinsei Bank Ltd vote for the lender's plan for a poison pill defence against an unsolicited $1.1 billion bid from SBI Holdings Inc.
Mid-sized bank Shinsei opposed SBI's approach last month, saying that the partial takeover offer could hurt interests of minority shareholders and that the offer price was too low. SBI, which owns an online brokerage and a bank, holds around 20% of Shinsei and wants to raise that to up to 48%.
The recommendation from Glass Lewis is likely to be seen as a setback for SBI, which sees Shinsei as part of a plan to create Japan's fourth-largest bank. Shinsei has said it would accept the offer if SBI raised the price and removed the upper limit on how much it would buy, but SBI rejected those requests.
"Shinsei's independent investors have been presented with a pointedly inequitable partial cash out, to be followed by a significant, one-sided restructuring very likely to involve substantial board and executive turnover and a heavily revised strategic profile," Glass Lewis said in its recommendation.
"In a rare case, we believe this framework alone is arguably sufficient to warrant support for Shinsei's proposed defence measures."
SBI, which says it can overhaul the mid-sized lender, has promised to make every effort to repay the 350 billion yen ($3.1 billion) in public money Shinsei received during a banking crisis two decades ago.
However, Glass Lewis said SBI had offered investors "no meaningful plan to address this issue".
Separately, the government-affiliated Deposit Insurance Corp of Japan said on Friday it sent both SBI and Shinsei a set of questions asking specifically how they can increase Shinsei's corporate value. The government owns around 20% of Shinsei.
Shinsei's shares closed down 3% on Friday at 1,808 yen, below SBI's offer price of 2,000 yen a share.
($1 = 113.6500 yen)
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.